Sears, Kmart eye more cuts

By ANNE D’INNOCENZIO and MICHELLE CHAPMAN
the associated press

Published: August 21, 2014;Last modified: August 21, 2014 07:43PM

HOFFMAN ESTATES, Ill. — Sears Holdings Inc. recorded a hefty second-quarter loss Thursday on another slump at its Kmart stores and flat sales at Sears stores, raising more concerns about the future of a company that once was a staple of American shopping.

The company said it plans to do more cost-cutting to right the ship. That includes closing more stores beyond the 130 that it had announced earlier this year. It said it still is looking at options to sell its Sears auto center business and Sears Canada operations. It recently spun off clothing business Lands’ Ends as a separate public company.

In Pueblo, the company closed one of its two Kmart stores last year. A Kmart continues to operate on the North Side. A Sears store continues to operate at The Pueblo Mall.

Sears, controlled by billionaire hedge fund investor Edward Lampert, lost $573 million, or $5.39 per share, for the period ended Aug. 2. That’s more than double the loss of $194 million, or $1.83 per share, a year earlier. It marked its ninth straight quarterly loss.

Sales at stores open at least a year is a key indicator of a retailer’s health because it excludes results from stores recently opened or closed.

The challenges facing CEO and Chairman Lampert are enormous. The company has been cutting costs, reducing inventory and selling assets to return to profitability.

Lampert, a billionaire hedge fund investor, combined Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy. It has faced mounting pressure from nimbler rivals like Walmart Stores and Home Depot. Sears also is dealing with broader issues that are tripping up many other retailers such as a slowly recovering economy that’s not benefiting all Americans equally.

“I am personally committed to investing in and driving our transformation, improving the profit performance of the company, ensuring our financial flexibility, all while creating shareholder value,” Lampert said in a prerecorded call released Thursday.